Rationale. Inflammation and immunologic responses appear to contribute significantly to neurodegeneration in (AD). In a pathological process termed gliosis, the brain's resident immune cells (microglia and astroglia) undergo chronic activation and possible proliferation, promoting neuronal injury and death by several means. Activated microglia and astroglia produce compounds that are directly cytotoxic to neurons, and they express molecules that greatly amplify immune and inflammatory processes in the brain. Excessive glial activation and proliferation are thought to be pivotal events hastening the demise of synapses and neurons in AD. Conversely, the growing understanding of immune and inflammatory pathology in AD has provided new opportunities for designing disease-altering treatments for AD. Preliminary clinical trials of anti-inflammatory drugs in AD patients, epidemiologic studies of anti-inflammatory drug use, and experimental models linking neurodegeneration with neuroimmune/neuroinflammatory processes suggest strongly that medications such as nonsteroidal-anti-inflammatory drugs (NSAIDs) and immunomodulatory agents may have an important role in altering the course of AD. CY is a potent anti-inflammatory and immunomodulatory drug that acts primarily by inhibiting proliferation of immune cells. Moreover, as immune cell proliferation appears to be an important aspect of AD pathophysiology and disease progression, an exploratory, dose-finding trial of a cytotoxic/cytostatic drug such as CY is appropriate, especially since CY is already widely used for the treatment of other immune-mediated illnesses. Furthermore, a preliminary European trial of CY in AD patients has already demonstrated an improvement in cognitive function that correlated highly with the degree of immunomodulation achieved.